Overcoming these systemic constraints requires a comprehensive transformation of the core tech function. The goals are straightforward: enable agility and adaptability; push standardization and simplification of the application landscape and IT infrastructure; build new capabilities; and manage the growing ecosystem (within and outside the organization). The devil lies in the details of execution. In our experience, five levers are available to media companies.
New Architecture. New digital architecture significantly increases the level of standardization in the application landscape and IT infrastructure, and permits flexibility where needed. Companies can centralize core media operations around a modular or even microservices concept based on distinct functionality, maximizing effective use of agile development and continuous delivery to implement new functionality fast. These capabilities are highly relevant to core media company operations, such as file transfer, content processing, editing, scheduling, rights management, content management, subscription management, quality control, archiving, and storage. New forms of architecture combine centralized horizontal application layers for joint usage across traditional and digital media production, and distinct vertical services to meet specific business requirements. An end-to-end workflow management system integrates vertical (specific) and horizontal (shared) applications.
Transition to Agile. Rapid time-to-market and fast provisioning of new functionalities are essential in digital media, especially for consumer-facing applications, but not all IT functions are ready to move (or iterate) at digital speeds. In the near term, pursuing a dual-speed IT function can be a useful transition strategy for media companies—so long as everyone concerned understands that this is a transitional phase. (See “The End of Two-Speed IT,” BCG article, August 2016.) The longer-term future of IT is one speed: all-agile, since agile has again and again proved its ability to get products to market and to deploy systems quickly at minimal risk.
Agile development and continuous delivery concepts enable fast delivery cycles and smooth deployment while ensuring that products match user requirements (and adjusting them quickly when they do not). Agile development methodologies also promote close interaction between business and technology departments, and the tightly managed iterative approach brings more flexibility to the development process. Although core systems, such as media resource planning, that don’t need new functionalities every two weeks can continue to operate at their own speed for a while, in the long run the inefficiencies of maintaining two parallel IT structures will become more pronounced. A complete switch to agile methodologies will make more sense for media companies at some point.
Cloud Introduction. The introduction of cloud-based solutions, such as software-, systems-, and platform-as-a-service, can help the technology function move toward creating digital value. We see a strong push for cloud transformation in global and local media players, especially with regard to “applications of record” and enterprise IT. Cloud-based solutions offer multiple benefits over company-hosted platforms, systems, and software, including lower implementation and maintenance costs, more-flexible cost management in the face of fluctuating user numbers, and enhanced cross-business-unit collaboration through standardized processes.
Increasingly we see media companies that run high-volume streaming services use cloud-based services to manage the need to scale up for peak periods. Some OTT providers have fully shifted transcoding, encoding, and storage infrastructure to the cloud. Netflix has demonstrated how efficient a cloud-only storage scenario can be. We expect the shift to the cloud to continue as a strong trend.
Data Management. Perhaps no technology function is more important—or more capable of delivering value—than data management. If data management is to deliver value, however, a clear vision must guide the function, and the company must manage the data as a strategic asset, rather than simply as customer or viewer information. This means that a team, department, or division has to own the data, ensure its quality, and actively manage its value. Attracting the right talent and paying attention to the right technology are especially critical. Today, most data management activities lack cross-unit coordination and depend on isolated technology assets; as a result, countless opportunities go unspotted or overlooked.
Smart data management lets media companies perform four crucial functions:
- Monitoring content performance across all consumer touch points
- Introducing end-to-end performance management to enable editorial and creative teams to instantly assess customer reception of content packages and new offerings
- Complementing well-performing content with best-fit advertising
- Engaging in constant content ROI monitoring and making real-time adjustments as required
In our experience, successful media companies build their data management capabilities step-by-step over time, starting with understanding their data assets and how they can add value, and then defining clear-cut use cases. Typically the first priority is targeted advertising, followed by personalized digital services and data-based content acquisition.
Digital Governance. Dealing with increased complexity and sustaining a new level of business-IT interaction require a more active and encompassing IT governance function. Companies can follow a number of best practices in this area. These include a close alignment between business and technology with formal and documented request management processes; near real-time budget monitoring and managed financial flexibility; and establishment of a single point of responsibility for key topics and tools. Business and technology should jointly prioritize requirements, and there should be an ongoing process to review changes in the environment and the need to align or realign roadmaps.
Companies also need to develop strong and efficient policies and processes for integrating partners who can help fill internal gaps and address future needs. The flexibility to make effective use of a combination of core internal skills and capabilities and external expertise and resources, especially when the need arises to scale up quickly, will be a differentiator. Tightly managing external partners (setting clear expectations and defined service levels, for example, and establishing close interaction and communication models) is key.
Adapting to the kind of disruption that is now taking place in media is no small order for any business. Adapting at digital speed while maintaining day-to-day operations is tougher still. But media companies that don’t move fast will find themselves left behind. Media is becoming a digital game, and data and technology are setting many of the new rules. Companies that do not transform their IT will soon have a hard time playing.
To Contact the Authors